The first several months of 2014 haven’t offered many encouraging signs about the Washington-area labor market.
Year-over-year job growth has been anemic, and the sectors that serve as the cornerstone of the local economy — the federal government and professional services — have been losing ground.
The latest data from the Labor Department shows that this pattern continued in May, with the metropolitan area adding a meager 6,000 jobs in the one-year period that ended that month. The unemployment rate rose in May from 4.8 percent to 5 percent, the Labor Department reported Tuesday.
“There’s no sign in there, at the state level or the metro level, that there’s a rebound anywhere,” said Stephen Fuller, the economist who directs the Center for Regional Analysis at George Mason University.
The professional services sector shed 4,000 jobs, while the federal government lost 10,300 positions.
The region’s job growth was led by the hospitality industry, with 7,700 jobs added, followed by the retail sector, with 5,100 jobs added.
Those gains, however, offer something of a troublesome signal about the contours of the local economy because positions in both of those sectors tend to be low-paying. Adding low-wage positions while not adding many middle-wage positions will hardly help to resolve the extraordinary income inequality that has come to define this region.
Other sectors that saw modest gains include education and health services, which added 4,200 positions, and financial activities, which added 3,700.
The construction sector lost 2,500 jobs, a weakness that Fuller said is likely related to stagnation in the housing market.
“I think prices have peaked,” Fuller said. “It isn’t that there aren’t high-priced houses available. The buyers aren’t willing to pay.”
Economists say a variety of factors have contributed to the overall sluggishness of the labor market. The unusually harsh winter likely kept a lid on hiring in the early part of the year. Meanwhile, contracting businesses are still working to adapt to the across-the-board budget cuts known as sequestration that hit them last year and which came as the federal government was already reducing spending.
The local unemployment rate still compares favorably to the national one. In May, the country’s unemployment rate held steady at 6.3 percent as the economy added 217,000 jobs. The Labor Department Thursday is scheduled to release national employment data for June. Economists surveyed by Reuters forecast that the report will show that the rate was unchanged at 6.3 percent and that 212,000 jobs were added.
Capital Business is The Post’s weekly publication focusing on the region’s business community. For more Washington business news, go to www.capbiz.biz.